British Gas Owner Centrica is scrapping standard variable tariff (SVT) for new customers as it plans pricing overhaul
British Gas owner Centrica has announced it is ditching the standard variable tariff for new customers by April, amid a range of measures it says well help reform the energy market more than the introduction of price caps.
The firm said it will also encourage customers to move away from the SVT, and will contact all of its customers at least twice a year. “We are keen to move all our customers off the SVT,” it said in an announcement this morning, with 10 per cent of British Gas SVT customers switching away from it in the first half of the year.
It comes after the government’s plans to lower the cost of energy bills.
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Iain Conn, group chief executive, Centrica said:
We fully recognise that the energy market can and should be improved, but further price controls will only set this back. We believe more action is needed and are ready to play a leading role.
Today we have set out the unilateral actions we will take to improve the UK energy market for our customers. This starts with the withdrawal of the Standard Variable Tariff which contributes to lower levels of customer engagement.
The firm has also called on the sector as a whole, regulator Ofgem and the government to work together, saying the industry “can do better” than imposing a temporary cap or freezing household energy bills.
Conn said: “We have long advocated that the end of the standard variable tariff is the best way to encourage customers to shop around for the best energy deal. But we also need a fairer way to pay for the changing energy system by removing government policy costs from energy bills. This will be fairer for everyone and especially those who struggle most with their bills.”
Centrica said the proposals should be evaluated in the period up to March 2018.
The firm set out seven actions today, all of which it said would be implemented by 31 March next year.
As well as withdrawing the SVT for new customers, Centrica said it will provide new offers “to respond to customers’ changing needs”, proactively offer customers a choice of fixed term tariffs at the end of their contract, and introduce a new fixed term default tariff.
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